This article explains how open market operations influence the U.S. money supply and interest rates through the actions of the Federal Reserve. It shows that when the Fed buys securities, it increases money supply and lowers interest rates, encouraging borrowing, spending and investment, while selling securities has the opposite effect. The article also highlights how these changes impact economic growth, inflation and employment, emphasizing the important role of open market operations in maintaining overall economic stability.
- Quote paper
- Bhupendra Thapa (Author), 2026, Open Market Operations. Effect on U.S. Money Supply and Interest Rates, Munich, GRIN Verlag, https://www.grin.com/document/1718569
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